“Concerns over a 'double-dip' recession seem overdone but fears are unlikely to fade as economic tensions linger,” Ashok Shah, the Chief Investment Officer at London & Capital, said.

A loss of economic momentum in the US and the jobless recovery is worrying and causing problems for policy makers, Shah added.

- Watch the full interview with Ashok Shah above.

“We will see periodic flights to safety as fiscal austerity measures bite into economic growth, low rate policies continue and the prospect of QE (quantitative easing) resurfaces,” he said.

“Bonds will do well as default rates decline, credit upgrades continue and dynamics in emerging markets improve.”

Stocks look more attractive after the August selloff, but investors need to beware of volatility, according to Shah. "If you have to be in stocks get into mega caps with strong balance sheets and those focused on high growth emerging markets.”

“Gold will be supported until QE policies are reversed and oil will continue to trade in a broad range as fears over growth in China and India have been absorbed into the price,” he said.

“The key risk remains the European periphery. Fears calmed down recently but have not gone away, when you look at the long-term dynamics there are problems,” Shah told CNBC.